By LEVI PULKKINEN, SEATTLEPI.COM STAFF

Published 10:00 pm, Wednesday, May 12, 2010

Four former employees of the now-defunct Crown College have been indicted by a federal grand jury on accusations that they bilked the federal government out of thousands of dollars.

Among those indicted Wednesday were Crown College's former vice president, Sheila Mullineaux; the college's admissions director and registrar, Jesica McMullin; and financial aid director Misty Lee. Also indicted is Jennifer Byers, the fiscal manager and bookkeeper.

In the indictment filed in U.S. District Court, the women are accused of obtaining subsidized loans to pay for Crown College tuition that was already waived for employees. Essentially, the grand jury contended, the women falsely applied for and received federal student loans and Pell Grants through mail fraud.

Through that fraud, the women are alleged to have wrongly received at least $65,750 in grants and loans.

First accredited in 1979, the private Tacoma college lost its accreditation in July 2007 and closed weeks later. The college offered associate's degrees in criminal justice and paralegal studies, as well as a bachelor's level business administration program.

By the time it shut down, according to the indictment, Crown College classes "were operated almost completely online."

"Crown's students participated in their online classes by logging on to 'classrooms' they had previously registered for through the school's website," according to the indictment. "While there were physical classrooms located within the buildings Crown operated, the vast majority of the teaching occurred on-line."

The indictment alleges the four women began scamming the federal government months before the college was closed, in December 2006.

The defendants are alleged in the indictment to have applied for federally insured financial aid and Pell grants, intending to use the funds for personal expenses after the college closed. Because the college was closing, the indictment continues, the women believed they wouldn't have to repay the federal loans.

Federal investigators contend the defendants drew at least three other people into the scheme, directing them to apply for federal student aid while knowing they weren't enrolled in the college.

In addition to a total of seven counts of mail fraud filed against the former employees, the Tacoma grand jury charged each of the women with one count of financial aid fraud.

None of the women has been jailed in the case. Each is expected in court for a preliminary hearing on May 28.